Australia potentially well-placed to pull in $315 billion in the next 10 years

Having spent the better part of the past four decades squandering its digital opportunities, Australia still has a shot at dropping in on the next $15 trillion wave.

The world is now entering the third wave of digital innovation, levelling up out of the internet and connectivity era into what the World Economic Forum is calling the “Fourth Industrial Revolution”.

Since digital innovation began back in the 80s with the first wave – the era of personal computing – Australia, with some pockets of success aside, has largely failed to cash in on the opportunities it has brought compared to many other countries.

‘To feed the world in 2050, global food production will need to increase by 50%’

It doesn’t have to be that way, as the next 10 years can potentially usher in entirely new ways of doing business. Autonomous robots, AI, remote sensors and the Internet of Things are the backbone of an immediate future in which digital innovation will add economic value through productivity gains and new revenue streams.

The CSIRO’s data innovation network Data61 has commissioned a report from alphaBeta to outline where the opportunities lie, and what Australia needs to do to ensure it doesn’t miss the third wave of digital innovation.

The third wave is flagged globally as a “$10-$15 trillion global opportunity”. alphaBeta’s report has identified a potential share for Australian industry worth $315 billion of that over the next 10 years.

The full report, “Digital Innovation: Australia’s $315B Opportunity”, is available online from today. According to Data61 CEO Adrian Turner, the information it contains could “seed the next generation of globally competitive industries resulting in economic growth and jobs”.

“Every sector of the global economy has been re-defined as a result of digital science and technology and the extensive use of data,” Turner said.

“This next digital wave to revolutionise existing industries and create entirely new ones is ours to capture. But the opportunity is perishable if we don’t collectively take action now.

“Progressive data-driven organisations are investing in four core areas to realise value from data; data capture, management, analysis and taking action with it. Combining this data with domain expertise, in areas like healthcare, agriculture and mining, is where we can create an unfair advantage.”

We’re focusing on the eight strategic areas worth a potential $155 billion it has identified where Australia can succeed in creating new digital products and services.

But first, it’s important to know we have the talent. The report notes that Australian research publications on computer science and AI are cited at one of the highest rates in the world. And they lead the world in terms of how much they are shared, outscoring even publications from China and the US.

Our reputation for innovation and research is spotless. It’s well past time we started cashing in on our talent.

Here’s where the opportunities lie:

Supply Chain Integrity

Image: Courtesy alphaBeta

Asia-Pacific’s consuming class can double from 552 million households in 2017 to 1.2 billion by 2030.

With better incomes and healthier lifestyles comes more demand for high-value food and pharmaceuticals.

In the last decade in China, consumers that feel the safety of food and medicine has tripled to more than 40%.

Is it real? Picture: Getty Images

Australia, with its reputation for supplying high quality food and medicine, has an opportunity to enhance its reputation by using blockchain and automated monitoring systems to unconditionally validate its products.

And Data61 has already begun working with the NSW Department of Primary Industries to ensure product integrity and minimise food fraud specifically for cherries, rock lobsters, abalone and citrus.

Image: Courtesy alphaBeta

Proactive Government

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Efficient government spending and better policy analysis is crucial to enabling stronger, better economic development, both in Australia and when it is helping its regional neighbours.

The increasing availability of data and the capacity to analyse it better means government policy and decision-making can be more effective, at less cost.

In Singapore, increased use of better data and analytics has resulted in crowdedness on buses reduced by 92% and waiting times on popular services dropping from 7 minutes to 3 minutes.

The Australian government currently uses the Multi-Agency Data Integration Project (MADIP) to link Medicare, government payments, persomal income tax and Census data to generate insights into the effectiveness of current policies.

The biggest potential challenge lies in ensuring citizens are confident their data will be used for positive outcomes.

Image: Courtesy alphaBeta

Legal Informatics

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It’s getting more expensive to comply.

85% of respondant to a McKinsey report last year said their governance, risk management and compliance costs rose in the past five years; and as much as 15-20% of total banking costs.

60% of Asian firms expect their time liasing and communicating with regulators will continue to rise.

Digital technology can help, and we’re already seeing a rise in the startups pushing new ways to automate auditing and compliance by converting legal documents and contracts into machine-readable formats.

It’s an expensive process right now, but there are big rewards on offer for anyone who can crack the code. In Australia alone, compliance is estimated to cost businesses $250 billion a year.

Image: Courtesy alphaBeta

Smart Exploration and Production

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The Australian resource sector has a problem:

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But they’re numbers that are also reflected worldwide, thanks to undisciplined capital investment and lack of experienced workers.

It’s also getting harder to find good ore, but sensor technology is starting to show a boost in efficiency in that space, as well as gains in facilitating better equipment and vehicle movement.

All up, data analytics and robotics could be saving the global industry up to $US390 billion per year by 2035.

There are also numerous worker safety and environmental benefits in using technology to do things better.

Image: Courtesy alphaBeta

Data-driven Urban Management

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By 2030, Asian cities are expected to be home to an extra 600 million people. Poorly managed urban growth can lead to Sydney huge demand on infrastructure, longer travel times, congestion and pollution.

Cities of the future not only need to be liveable, they need to find ways to mitigate the productivity and health costs of poor planning.

Sydney traffic. Photo by Ian Waldie/Getty Images.

Already, drone and satellite technology is enabling better Building Information Modelling (BIM) that is cutting the lifetime costs of assets by up to 20%.

Connected sensors can collect massive amounts of transport data – both pedestrian and vehicle – and manage it in ways we’ve been unable to see up until recently.

Image: Courtesy alphaBeta

Cyber-physical Security

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All those Inter of Things objects? Their security will be paramount in the next 10 years, because they’ll be crucial to the development of all sorts of physical and operational technologies such as vehicles, factories and utilities.

By 2020, the world will be running as many as 30 billion IoT devices. And every year, at this stage already, hackers are producing as much as 120 million new variants of malware.

If you want to fight that, Asia is the place to be in the next 10 years. Its companies currently spend less than 50% less on cyber security than North America firms, and take 1.7 times longer to respond to data breaches than the rest of the world.

Image: Courtesy alphaBeta

Digital Agriculture

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“To feed the world in 2050, global food production will need to increase by 50%.”

That’s just about all you need to know – apart from this alarming chart:

Image: Courtesy alphaBeta

Climate change is expected to threaten a further 10-25% of global crop yields. Good land is harder to find, or getting buried under McMansions.

The gauntlet is there to be taken up by companies that can find ways – typically, data and robot-driven – to increase crop yields and improve or fabricate entirely new ways to grow our food.

Already, vertical farmers are reporting usages of 95% less water for an 80% increase in yield.

Image: Courtesy alphaBeta

Safe and Secure Precision Healthcare

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We’re getting better at getting older, which sounds great. But by 2030, Australia’s ageing population could increase its public health expenditure by between 1-4% of GDP. Gah.

Globally, over-60s will increase from 13% now to 21% by 2050, so we need to find better ways to stay healthy and keep those maintenance costs down.

Picture: David Silverman/Getty Images

Again, data collection is our friend, along with lab testing and genomics for better early diagnosis, targeted treatments and prevention.

The biggest problem with that right now is an estimated 80% of healthcare data is reportedly unstructured, making it difficult to access what is useful.

Image: Courtesy alphaBeta

Get up, get busy, get moving

And that’s just a start.

The alphaBeta reports says there are many more digital opportunities opening up in the next 10 years. We can’t even fully comprehend what quantum computing – which we are world leaders in – is capable of until we properly switch it on.

We’ve only just begun to tap the space industry, just as we’re about to build the world’s most advanced radio telescope array in outback WA.

But Australia needs to keep up. Here’s a final chart to show just how important that is over the next 10 years. It’s the productivity growth of the world’s top 10 ICT-intensive industries plotted against the rest:

Image: Courtesy alphaBeta

You snooze, you lose.

Right now, ABS and OECD stats show Australian digital innovation has so far managed to capture just 7.4% of its GDP.

For the rest of the world’s advanced economies, that figure is at 11.2% of GDP and running away.